E-Invoicing and VAT reporting

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VAT Reporting involves summarizing a company's transactional records, encompassing taxable sales, purchases, and VAT-related data. Typically, this report is submitted on a monthly or quarterly basis, in accordance with a country's regulations. In the European Union, the primary forms of VAT Reporting are VAT declaration (or VAT return) and SAF-T. There's an anticipation that the SAF-T electronic audit file will progressively replace traditional VAT returns in numerous countries.

SAFT reporting

The SAF-T, which stands for Standard Audit File for Tax, is a globally recognized standard designed for transmitting accounting data electronically from businesses to their respective national tax authorities. The initial definition of its standards is established by the OECD. While the file specifications utilize XML, the OECD doesn't mandate a specific file format. Presently, SAF-T reporting requirements are enforced in various European nations.

SAF-T Requirements in Europe

Within this framework, enterprises are tasked with locating and extracting comprehensive financial transaction data. These data are then organized into electronic XML files and subsequently submitted to tax authorities. This submission can occur periodically or in response to an audit request.

Countries Adhering to SAF-T

The SAF-T regulations are currently enforced in Austria, Czechia, Poland, Norway, Portugal, Lithuania, Luxembourg, and France. APVI has developed tailored SAF-T solutions for each of these countries and has successfully implemented numerous projects. Romania is also on track to adopt a SAF-T requirement similar to Poland's. A pilot phase for large taxpayers is set to commence early next year, with full implementation expected to be mandatory by July 2021.

Advantages of SAF-T

One of the chief advantages of SAF-T is its ability to streamline and economize tax audits for authorities, with the overarching goal of minimizing VAT fraud and reducing the VAT gap. Simultaneously, automated VAT data reporting simplifies the reporting process for businesses.

APVI's SAP add-on facilitates seamless and automated extraction of financial data, which is subsequently processed and transformed into XML files. This process can be conveniently monitored using the APVI SAF-T Cockpit. Ultimately, the XML files are transmitted to tax authorities through an APVI Connector.

SAF-T Schema

While SAF-T adheres to a similar format based on OECD SAF-T SCHEMA VERSION 2.0 across different countries, each country's legislation prescribes distinct mandatory fields for the report. Consequently, businesses need to account for the specific regulations and standards of the country where reporting obligations apply.